Emden’s Construction Law Hong Kong – Issue 66: First Local Commentary on Cap 652 Now Available

The latest update to Emden’s Construction Law Hong Kong marks a significant milestone in the legal landscape of Hong Kong’s construction industry. Issue 66, authored by Arthur McInnis, delivers the first local commentary on the newly enacted Construction Industry Security of Payment Ordinance (Cap 652), which came into force on 28 August 2025.

This ordinance introduces a statutory framework for payment security and adjudication in construction contracts, aiming to reduce payment delays and disputes. In response, Chapter XXIV on Adjudication has been rewritten to incorporate the ordinance’s provisions, offering practitioners a clearer and more practical guide to navigating adjudication under the new law.

Updates covered in this issue:

1. Updates to Adjudication Provisions
   Chapter XXIV on Adjudication has been rewritten to integrate the provisions of the Construction Industry Security of Payment Ordinance (Cap 652), resulting in clearer guidelines for payment security in the construction industry.

2. Variation of Rights and Obligations
   The landmark case in R (Cobalt Data Centre 2 LLP and anor v Revenue and Customs Comrs [2024] UKSC 40) explored the theory and tests for determining when parties can alter their rights and obligations by varying or replacing terms.

3. Construction of Contractual Clauses
   In Dipcon Engineering Services Ltd v Urban Development Corp of Trinidad and Tobago Ltd [2025] UKPC 29, the Privy Council addressed the construction of clauses in the FIDIC 1987 Conditions. The focus was on compliance, specifically regarding notice and substantiation requirements.

4. Rebuttable Presumptions in Legal Proceedings
   The case of Secretary of State for the Department for Environment, Food and Rural Affairs v Public and Commercial Services Union [2024] UKSC 41 examined the application and implications of rebuttable presumptions in legal contexts.

5. Collateral Warranty and Construction Contracts
   Abbey Healthcare (Mill Hill) Ltd v Augusta 2008 LLP [2024] UKSC 23 clarified that if a collateral warranty is merely derivative of the obligations within the main building contract, it does not constitute a distinct contract for the purposes of s 104(1) of the Housing Grants, Construction and Regeneration Act 1996.

This issue is essential reading for legal professionals, contractors, and consultants seeking to stay ahead in Hong Kong’s dynamic construction law environment.

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